S 0453 General Bill, By Hawkins and Ritchie
 A BILL TO AMEND SECTION 38-71-620, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO INDIVIDUAL ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO
 INCREASE FROM THIRTY-ONE TO SIXTY DAYS THE ADVANCE NOTICE REQUIRED FOR PREMIUM
 INCREASES; TO AMEND SECTION 38-71-730, RELATING TO GROUP ACCIDENT AND HEALTH
 INSURANCE POLICIES, SO AS TO REQUIRE SIXTY DAYS' WRITTEN NOTICE BEFORE A
 PREMIUM INCREASE MAY BECOME EFFECTIVE; TO AMEND SECTION 38-33-80, RELATING TO
 HEALTH MAINTENANCE ORGANIZATIONS, SO AS TO REQUIRE SIXTY DAYS' WRITTEN NOTICE
 BEFORE A PREMIUM INCREASE MAY BECOME EFFECTIVE; AND TO AMEND SECTION
 38-71-315, RELATING TO A DECREASE IN PREMIUM CHARGES FOR INDIVIDUAL ACCIDENT
 AND HEALTH INSURANCE, SO AS TO REQUIRE SIXTY DAYS' NOTICE PRIOR TO THE
 EFFECTIVE DATE OF THE REDUCTION.

   03/14/01  Senate Introduced and read first time SJ-12
   03/14/01  Senate Referred to Committee on Banking and Insurance SJ-12

TO AMEND SECTION 38-71-620, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INDIVIDUAL ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO INCREASE FROM THIRTY-ONE TO SIXTY DAYS THE ADVANCE NOTICE REQUIRED FOR PREMIUM INCREASES; TO AMEND SECTION 38-71-730, RELATING TO GROUP ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO REQUIRE SIXTY DAYS' WRITTEN NOTICE BEFORE A PREMIUM INCREASE MAY BECOME EFFECTIVE; TO AMEND SECTION 38-33-80, RELATING TO HEALTH MAINTENANCE ORGANIZATIONS, SO AS TO REQUIRE SIXTY DAYS' WRITTEN NOTICE BEFORE A PREMIUM INCREASE MAY BECOME EFFECTIVE; AND TO AMEND SECTION 38-71-315, RELATING TO A DECREASE IN PREMIUM CHARGES FOR INDIVIDUAL ACCIDENT AND HEALTH INSURANCE, SO AS TO REQUIRE SIXTY DAYS' NOTICE PRIOR TO THE EFFECTIVE DATE OF THE REDUCTION.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 38-71-620 of the 1976 Code is amended to read:

"Section 38-71-620. If an accident and health insurance policy contains provisions which reserve the right to the insurer to increase the premium, the policy shall also provide that at least thirty-one days' prior written notice of a rate increase must be given to the insured before the rate increase becomes effective. An individual accident and health insurance policy containing provisions that reserve the right to the insurer to increase the premium must also provide that at least sixty days' prior written notice of a rate increase must be given to the policyholder before the rate increase becomes effective. The date of postmark, rather than date of receipt, shall establish whether the notice is within the specified time period for any mailing containing the written notice required by this section."

SECTION 2. Section 38-71-730(5) of the 1976 Code is amended to read:

"(5)(a) Except as provided in item (1)(b)(vii) of this section, the premium for the policy must be paid by the policyholder from the policyholder's funds or from funds contributed by the insured persons, or from both.

(b) All policies containing provisions that reserve the right to the insurer to increase the premium must also provide that at least sixty days' prior written notice of a rate increase must be given to the policyholder for group health plans as defined in Section 38-71-840(B) and to the insured for any other policy of group health, group accident, or group accident and health insurance before the rate increase becomes effective. The date of postmark, rather than date of receipt, shall establish whether the notice is within the specified time period for any mailing containing the written notice required by this section."

SECTION 3. Section 38-33-80(B) of the 1976 Code is amended to read:

"(B)(1) No schedule of charges applicable to individual health maintenance organization contracts may be used until a copy of the schedule has been filed with and approved by the director or his designee. The director or his designee may disapprove this schedule of charges if it is determined that the benefits provided in the contracts are unreasonable in relation to the charges.

(2) Any individual health maintenance organization contract containing provisions that reserve the right of the health maintenance organization to increase the schedule of charges must also provide that at least sixty days' prior written notice must be given to the policyholder before the rate increase becomes effective. The date of postmark, rather than date of receipt, shall establish whether the notice is within the specified time period for any mailing containing the written notice required by this section.

(3) Any group health maintenance organization contract containing provisions that reserve the right of the health maintenance organization to increase the schedule of charges must also provide that at least sixty days' prior written notice must be given to the contractholder for group health plans as defined in Section 38-71-840(B) and to the subscriber for any other group health maintenance organization contract before the rate increase becomes effective. The date of postmark, rather than date of receipt, shall establish whether the notice is within the specified time period for any mailing containing the written notice required by this section."

SECTION 4. Section 38-71-315 of the 1976 Code is amended to read:

"Section 38-71-315. Any insurer of individual accident and health insurance may at any time, except when required by law or order of the director or his designee, voluntarily decrease its premium charge for any approved policy form without the prior approval of the director or his designee. However, the insurer must notify the director or his designee and the consumer advocate for information thirty days prior to the use of the revised premium charge. Notwithstanding any other provision of law, any time within one year after using such revised premium charge, the insurer may return its premium charge back to the previously approved level by informing the policy holder, the director or his designee, and the consumer advocate of the revision thirty at least sixty days prior to the effective date. The director or his designee may not disapprove such revision. The date of postmark, rather than date of receipt, shall establish whether the notice is within the specified time period for any mailing containing the written notice required by this section."

SECTION 5. This act takes effect upon approval by the Governor.